Online casino operator 32Red (TTR) said it "expects litigation" after its extensive efforts to mitigate a new Point of Consumption tax in the UK look likely to fall on deaf ears. Chief executive Ed Ware thinks the hefty duty, due in December this year, will be "dangerous" for the UK’s consumer gambling market.
The group reiterated its concerns after another year of record figures and payment of a special dividend. After the deduction of customer bonuses and incentives, net revenues rose 15 per cent to £25.4m. The strong trading has also continued into the new financial year, with gross and net revenue trading 5 per cent higher in the first nine weeks.
Mr Ware insisted the group was "more than happy to pay tax", but "at the right level" and warned that a "cynical" system could prompt the emergence of a black market. A similar trend is said to have erupted in Italy under such tax regimes. But this hasn’t stopped 32Red from pushing into the Italian market, reaping £1.3m in gross revenue after a single year of trading in the country.
Numis predicts pre-tax profits of £5.7m for 2014, giving EPS of 7.3p, up from 6.1p in 2013.
32RED (TTR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 78p | MARKET VALUE: | £55m | |
| TOUCH: | 77-80p | 12-MONTH HIGH: | 89p | LOW: 46p |
| DIVIDEND YIELD: | 2.3%** | PE RATIO: | 25 | |
| NET ASSET VALUE: | 5p* | NET CASH: | £3.4m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 12.7 | 0.53 | 0.76 | nil |
| 2010 | 16.9 | 1.05 | 1.50 | 0.50 |
| 2011 | 25.0 | 2.16 | 2.94 | 1.20 |
| 2012 | 32.1 | 2.04 | 2.81 | 1.40 |
| 2013 | 38.8 | 2.29 | 3.09 | 1.80 |
| % change | +21 | +12 | +10 | +29 |
Ex-div:31 Mar Payment:02 May *Includes intangible assets of £2.28m or 3p per share **Excludes special dividend of 2.5p a share paid in 2013 | ||||
